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Duke Nukem series creator 3D Realms/Apogee Ltd. has responded to publisher Take-Two's lawsuit over the incomplete state of Duke Nukem Forever, revealing that 3DR is continuing to work on the long-delayed title alongside word that a previously unknown separate Duke game was in the works at a "well-known videogame developer."
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The new effort, titled "Duke Begins," was part of the October 2007 Agreement that saw Take-Two provide 3D Realms with $2.5 million. That sum was paid July 2008 in order to "help fund the development of the DNF game," with 3D Realms having previously said the money was "in connection with another agreement for an unannounced game."

The Take-Two-published Duke Begins was slated for release by mid-2010, with development set to begin within 2 months of the October 2007 agreement and 3D Realms stating that it needed to approve "any changes to that [development] schedule."

"All development work by the third-party game developer" on Duke Begins was halted in April 2009, 3D Realms claims "upon information and belief." However, 3D Realms says that "Take-Two...simply denied [the stoppage]," with a later letter to Take-Two VP Dan Emereson regarding the game's status said to have been "ignored."

As 3DR believes that Duke Begins "has been delayed by 12 months or longer," the company says that the push has harmed both 3DR and the Duke franchise, and will "delay any royalty payments...from sales of the Duke Begins game and prevent Apogee from being able to repay the [$2.5 million] advance when it becomes due in 2012."

Furthermore, 3D Realms believes that Take-Two is "taking such actions with a goal of pressuring [3D Realms/Apogee Ltd.] to sell the Duke Nukem franchise rights to Take-Two for less than their true value."

Since 3DR was not consulted regarding its perceived delay of Duke Begins, the company accuses Take-Two of breaching the October 2007 contract, and is demanding a jury trial, with damages believed to "be far in excess of $75,000, excluding interest and costs, including lost royalties and damage to the Duke Nukem franchise rights."

3D Realms adds that the October 2007 Agreement also served to "extinguish any right Take-Two had to any sequel to the DNF game or any videogames based upon a Duke Nukem movie."

On Duke Nukem Forever

The developer also shed additional light on negotiations with Take-Two regarding a 3D Realms-developed Xbox 360 edition of the then-PC only Duke Nukem Forever. Along with the Xbox 360 port, the negotiations included the addition of multiplayer and the funding necessary for 3D Realms to complete Duke Nukem Forever PC within 12 months.

3D Realms says that it requested $6 million to "cover the costs to complete both the Xbox 360 and PC versions" of the notoriously long-in-development title, with Take-Two supposedly agreeing to this amount. However, Take-Two lowered the amount of $5 million, and, "at the last minute (on April 22 [2009])" further lowered it to $2.5 million.
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This coincides with 3D Realms' previous statement that Take-Two "materially changed the parameters of the proposed funding agreement" into something 3D Realms could not "financially afford," with 3D Realms then rejecting an "unacceptable" proposal Take-Two made for the franchise and development team.

3D Realms adds that Take-Two couldn't have been "unsure of the development progress" for the game, as Take-Two claimed in its filing, because Take-Two "stated it was impressed with the gameplay and pleased with the development progress on the game" when 3D Realms visited the company in April 2009.

The negotiations ceased on May 1, 2009, according to 3D Realms, with the company laying off "most of the DNF game development team" a few days later on May 6. 3D Realms claims that "Take-Two was fully aware this was going to happen weeks before this date is a funding agreement was not reached."

3D Realms also denied allegations that it has "a substantial amount of funds deposited in an off-shore account."

Surprisingly, 3D Realms explicitly notes that it continues to work on "the development of" Duke Nukem Forever, though "it released the majority of its employees working on the development" because of a "lack of funding to sustain the high level of development."

"[3D Realms/Apogee Ltd.] admits that it has continually worked on the development of the DNF for many years, and continues to do so," reads the specific clause.

Lastly, 3D Realms says that "Take-Two in not entitled to any relief on its claims" for various reasons, including "unclean hands," noting that "Take-Two has no right to access the source code for the PC Version of the DNF Game until the game is completed by [3D Realms/Apogee Ltd.]," the "DNF License Agreement does not provide a deadline," and "the option [for Take-Two] to develop such 'Console Versions' of the DNF game is not exercisable unless and until the PC Version of the DNF game is released at retail."

"3DR has been in nearly a dozen lawsuits (including against Warner and Fox)," 3D Realms/Apogee Ltd. founder Scott Miller said of Take-Two's pending litigation exactly one week ago. "We're always innocent, and we always win. This one is no exception. Give it a year, then the truth will come out."

At the time, Miller added that "filed lawsuits are entirely one-sided statements, based on knee-deep BS and with more spin that[sic] a top."

If you're interested, the full 20-page court document can be found over on FileShack. Kudos to GamePolitics for noticing the filing, and thanks to Kristian for the tip.